Every parent wants to see their kids succeed in everything they do. Reaching life goals is easier without the added stress of being financially responsible.
If you take the time to teach your kids the ins and outs of finances, they will have the wisdom and financial savvy to make smart decisions toward reaching goals.
Kids learn by example and money is no different. Set the right financial example for your kids by talking about your financial decisions and lifestyle. Explain what a monthly bank statement is, show how to create a functional budget, talk about the actual costs of things, and teach them how to rationalize purchase decisions. Be open with your kids about what it means to be a responsible consumer, but avoid burdening them with financial stress.
Here are some more ways to set your kids up for financial success.
Give your kids pocket money at an early age.
Giving your kids pocket money at an early age is an effective way to teach them financial skills. When you present your kids with a weekly allowance, use that time to teach the concept of budgeting, financial planning, and goal setting. Giving your kids a weekly allowance contingent upon completing chores or family jobs around the house will teach them the link between working hard and financial rewards. Talk to your kids about how they plan to use their pocket money and help them achieve financial goals.
Make sure your kids understand the value of hard work.
Kids need to understand the value of hard work and recognize that having a part-time job is essential to growing up. High school kids need to learn how to balance studying, socializing, and financial responsibilities sooner rather than later. A part-time job teaches kids responsibility, the importance of honoring commitments, and the value of money.
A part-time job may help adolescents with behavioral problems to develop social skills, but behavioral problems could also be a sign of a mental health issue that requires the attention of a child psychologist. The Ross Center’s Child and Adolescent Program features trained psychologists and therapists who provide young patients with evidence-based assessment and treatment. The team at Ross Center is specially trained in pediatric mental health and can treat issues related to child development, cognitive development, and child psychology.
Nurture an entrepreneurial spirit.
Nurture your kid’s entrepreneurial spirit and help them develop business instincts. Helping them start a small business for neighborhood babysitting or lawn mowing services will nurture an appreciation for economics, customer service, and business operations.
Support your kid’s keen interest in business and encourage them to learn independently. Kids who love to tinker with computer hardware and operating systems would be well-suited for a computer support specialist program. ASPIRA City College’s (AKA WFI City College) computer support specialist program combines technical aptitude and people skills. In four semesters, students will learn the skills and knowledge necessary to excel in the information technology industry.
Teach your kids how to invest.
Teach young children how to invest and do it with them. Explain the concept of shares and how they work using real-life examples. As kids grow, teach them how the stock market works and explain why a stock’s cash value fluctuates. A lower-risk alternative to giving your kids stocks is to set up a child’s 529 plan. With an education savings account, small amounts of your money are invested in hundreds of stocks in a tax-advantaged way.
Part of setting your kids up for financial success means ensuring that they will be financially cared for in the event you or your spouse pass away. iSelect allows users to compare different types of life insurance policies based on what is most important to them in an insurance policy. Their dedicated life insurance advisors can help explain how much life insurance is best for your specific needs and what type of life insurance coverage is advisable. Medical history, pre-existing health issues, lifestyle, occupation, and gender are all factors to consider when looking at insurance companies. From term life insurance with death benefits to trauma coverage, compare life insurance with iSelect to find the right life insurance for you and your family.
Teaching your kids how to be financially successful early is an investment in their overall future success.